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2011 (3) TMI 1031 - AT - Income TaxIncome from sub-letting - Business income or other sources - Deduction u/s 10A - Depreciation claim - Held that:- It is a case where a few of the business assets were let out by the assessee while the assessee was carrying on his other business activities. It will thus be a case where the assessee exploited its business assets to earn income. In these circumstances the income in question has to be assessed under the head income from business. It is clear from the terms of the agreement that hard ware and net-working equipment were also provided to CTS by the assessee. Therefore, the assessee would be entitled to depreciation on the various assets leased. The fact that in the TDS certificate the payment to the assessee is shown as rent will not be conclusive. In such matters the real nature of the receipt has to be examined in the light of facts of a given case and the terms of the agreement. Therefore, of the view that claim of the assessee ought to have been accepted. Deduction u/s 10A/10B - Held that:- It is not in dispute that in AY 2000-01 in assessee's own case decided identical issue - when the assessee writes off the provisions during the impugned assessment year as liability no longer required written back, and the amount was credited to the Profit and Loss account, therefore such income in our opinion will be eligible for deduction u/s. 10B of the Act being 'derived' from export activity - As regard the remaining amount relating to Pune unit which admittedly had loss, cannot claim the benefit of deduction u/s. 10B as there is no profit - Appeal is partly allowed miscellaneous income derived from the export undertaking - Held that:- Though the learned counsel argued that the issue can be decided because the Assessee is entitled to deduction statutorily on the incomes in question - Appeal is allowed by way of remand Losses of Pune unit - whethet not be allowed to be set off against the income from other sources? - Held that:- There is no dispute that the expenditure incurred by the assessee are revenue in nature as they are incurred on rent, electricity charges, brokerage, security expenses, etc. The expenses towards brokerage, rent, electricity etc. cannot be said that they are in the character of capital in nature. The observation of the CIT(A) that in future year the assessee has to claim exemption u/s. 10A and thereafter he disallowed the claim of the assessee for set off of the loss against the income of other unit by observing that since the income is exempt u/s. 10A, therefore, the provisions of section 14A are applicable. In our considered view, the provisions of section 14A are not applicable. Because the assessee has not claimed any exemption u/s. 10A for the year under consideration. Therefore direct the AO to allow the claim of set off of the assessee. Disallowance of setoff of losses of earlier years against the income of the appellant - Held that:- In the case of Enercon Wind Farms (Krishna) Ltd. vs. ACIT (2007 (12) TMI 306 - ITAT MUMBAI) this Tribunal has taken the view that provisions of Sec.10-B(6)(ii) are applicable only after the tax holiday period is over. The Tribunal held that if after allowing deduction u/s.10-B there was certain income still left with the Assessee, the same will be total income of the Assessee to which all other sections of the Act, including Sec.72 would apply and carried forward losses could definitely be set off against such total income. Respectfully following the decisions referred to above, we direct the AO to allow the claim of the Assessee.
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